The best defense is a good ... relationship
Military markets can help a company grow but don’t underestimate the challenges
By Garry Kranz
Fueled by the global war on terror, the Pentagon is displaying a voracious appetite for advanced materials and smart sensors that could give soldiers an edge against often elusive enemies. It is a potentially lucrative opportunity for small companies developing cutting-edge technology. But success will hinge upon their ability to work with their bigger brethren.
Take Science Applications International Corp., for example. SAIC, as it is generally known, is a huge systems integrator based in San Diego. It is teaming with several nanotech companies to pioneer new military-related applications, including Nanosys Inc. of Palo Alto, Calif. The companies have joint contracts to develop new nanomaterials for use in biosensors, solar cells and memory devices.
SAIC is also under contract to market the products of Metal Storm Ltd., an Australian company that makes all-electronics weapons systems, including a MEMS-based mortar system.
“We look for small company partners whose technology is going to be applicable to (solving) a key Department of Defense problem in the fairly near future,” said Todd Hylton, SAIC’s director of advanced materials and nanotechnology.
It’s a good match. Research-oriented startups often have promising technologies but lack the money to commercialize their research. Deep-pocketed defense firms, on the other hand, specialize in systems integration and production.
“We have a lot of needs for advanced technologies across all of our platforms, and it’s not possible even for a large company like ours to develop all the technologies we need,” said Sharon Smith, director of advanced technologies at aeronautics manufacturer Lockheed Martin Corp. in Bethesda, Md. “It’s important for us to (look) externally to find where these technologies are being developed.” That means universities, government labs and smaller firms.
A case in point is Lockheed Martin’s agreement with Nanosonic Inc., a 60-person company launched eight years ago in Blacksburg, Va. Lockheed and Nanosonic say they are working on a number of development projects for new materials and coatings. The most visible manifestation is “metal rubber,” a highly elastic composite made of plastic and metal ions.
Metal rubber is produced using Nanosonic’s self-assembly process in which individual molecules are stacked together in layers. One possible military application would be using it to make warplanes whose wings adapt to different flying conditions.
Yet the pitfalls are many for smaller companies. To win over risk-averse military agencies along with the defense companies that supply them, small firms need to be sure there is a path from their research to commercially viable products. BAE Systems Inc. of Rockville, Md. last year declined to ink agreements with three separate nanotech companies whose technologies weren’t sufficiently mature, despite more than a year of evaluation.
“The worst mistake (small) companies make is underestimating how much time, money and other resources it will take to bring their products to market,” said Steve Danziger, program manager for BAE.
Nanotechnology companies also need to target development proposals to solve specific problems confronting defense firms, said Lockheed Martin’s Smith. The company gives specific instructions on its Web site to guide would-be partners on criteria they’ll need to meet to become a Lockheed Martin supplier.
“For any type of collaboration or strategic alliance in the nanotechnology area, first off we look to see if the technology (of a small company) is a match for us: Does the company have capabilities that we don’t have?” said Smith. “After that, we look at whether it has good quality practices and a good reputation for meeting cost and delivery schedules.”
Military markets can also be limited. “The truth is that the defense department may spend a lot of money developing a new technology but may not buy a large quantity of (finished) items,” said SAIC’s Hylton. Therefore, small companies should develop their technologies with an eye on both military and industrial applications - a so-called “dual use” strategy.